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Global Income Inequality is NOT Falling

posted by azrael on Sunday August 10 2014, @04:22AM   
from the hedging-bets dept.

gewg_ writes:

The One Percent Are Literally Rich Beyond Measure

We already know that the top one percent of income earners [sic] are getting more and more money while things stall at the bottom. But even so, the sheer amount we think they have is probably an undercount because it's so hard to measure.

The wealth of the most well-off people is under-counted because they hide it in tax shelters, keep it in foundations and holding companies, and don't respond to questionnaires, according to a Bloomberg analysis of recent research. Economist Gabriel Zucman had initially estimated that the top 0.1 percent, who have at least $20 million in net wealth, held 21.5 percent of all wealth in the United States in 2012, but after estimating what is hidden in offshore tax havens, that number is more like 23.5 percent.

Survey data is also faulty because the sample sizes are so small. The Federal Reserve's Survey of Consumer Finances found that the one percent held 34 percent of wealth in 2010, but that's more like 35 to 37 percent, according to a new paper.

Given the under-counting of data, this likely means that findings that wealth inequality had been dropping are wrong. With preliminary adjustments, the Gini coefficient, a measure of income inequality, stayed basically the same over recent decades. "With a 'top heavy' adjustment, the decrease in inequality - present when we use all other adjustments - almost entirely dissipates," according to a paper Bloomberg cites from December.

• Re:What a let down (Score: 3, Insightful) by khallow on Sunday August 10 2014, @10:11AM

  by khallow (3766) on Sunday August 10 2014, @10:11AM (#79621) Journal

  But he was born into it.

  [...]

  Unless the taxpayer spots him some more money, like it did a couple of years ago.

  Uncanny how I anticipated that.

  What should matter to us is how they got that wealth.

  Moving on, you wrote:

  Now, I've been ripped off to the tune of $50k by them in the last two years. Does that mean that I'm bad at personal finance and should be counted

  That's a fair bit of money and I imagine you aren't claiming you're one of the 1%. In my book, getting ripped off for that much is a good indication of being bad at personal finance - especially, if it's a significant portion of your finances.

  So going back to your boss, he got rich by being the son of the right people, soaking some public funding, and ripping you off. And somehow I'm an idiot for caring how he made (and apparently continues to lose) his money?

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